Many of Iraq's reconstruction projects are being put on hold after a spate
of foreign kidnappings and attacks on convoys in Baghdad
grounded foreign and Iraqi contractors.

"We'll give it another week. If it doesn't improve, we'll have to
leave," says Trevor Holborn of the Amman-based Shaheen Group, one of
hundreds of foreign workers who have suspended their operations and headed
for shelter inside the walls of the Green Zone, the heavily fortified
enclave where the occupation has its headquarters.

"We still have people in Iraq, but we may not able to work on a day to day
basis," said a contractor with a big US energy company. "Right now Iraq is
not a safe place to work, and the safety of our staff
comes first."

The kidnapping of at least 10 foreigners, and according to some
reports as many as 30, has shaken the already fragile confidence of
contractors. The hostages included an employee of the Houston-based
company, Kellogg, Brown & Root, which handles supplies and logistics for
US forces and the occupation administration and is reputed to be one of
the best defended companies in the country. Thomas Hamill, 43, of Macon,
Mississippi, was captured on Friday during a convoy ambush.

Coalition officials say they have contingency plans for an evacuation of
civilians, but remain fully staffed. One said it was a "miracle" that none
of the scores of mortars and rockets which have so rocked the enclave have
hit their targets.

British diplomats and some contractors are bunkered down in an
underground car-park inside the Green zone, dubbed the "Batcave". But many
American contractors are housed in trailer accommodation. Their sides have
been bolstered with sandbags but the soft-top roofs are singularly
vulnerable to mortar attack.

Amid continuing negotiations for a ceasefire, insurgents have
continued torching convoys carrying food and fuel to Baghdad.

Coalition authority officials deny the attacks on their supply lines have
interrupted the delivery of vital goods, but contractors say
Iraqi drivers are shying away from work with the coalition leaving ports
clogged with containers.

"Try to lease a truck now, no one will give you one," said Faisal
Khudairy, an Iraqi contractor with a large deal to build a military base
north of Baghad.

The coalition's Project Management Office (PMO), which oversees $8bn
(4.7bn) of US reconstruction funds, says it remains committed to
rebuilding Iraq and is intent on finding Iraqi partners to assist the
primary US contractors it named last month. "We've got our prime
contractors on the ground. It will not halt reconstruction," said
John Procter, an official with the project Management Office in
Baghdad.

He said that the reconstruction effort was vital if the coalition was to
soak up Iraq's millions of unemployed malcontents who are a
breeding ground for the insurgency.

But it was not clear if the coalition would meet its target of
employing 50,000 Iraqis by 30 June, when the US governor of Iraq,
Paul Bremer, is scheduled to relinquish control of Iraq.

Mr Procter said that Iraq's trade fair, postponed last week because of the
risk of attack, was being relocated from Baghdad to
Suleimaniya, a city in the former Kurdish haven, and would open on April 30.

Another conference on oil exploration scheduled to take place next week in
the British-administered Gulf port of Basra is reported to have been
indefinitely postponed. Several foreign companies and aid agencies say
they are also providing for the evacuation of
non-essential staff.

"We gave our staff the freedom to go home to whoever would like to do so,"
said Mohammed Moneim, chief operating officer of the
Kuwaiti-based Kharafi group, which has over 100 foreign staff in Iraq
working in the oil and construction sectors. But Mr Moneim said that the
company was also committed to fulfilling its responsibilities to its 1,500
Iraqi staff.

At least two of the three banks that received their licences last
January have yet to begin operations inside Iraq. Officials at HSBC, the
UK bank, said it was unlikely services would be available until at least
the end of the year. Baghdad bank has also temporarily
closed three of its 20 branches, said its chief operating officer, Mahmood
Muwaffaq. Some contractors complained that their contracts prevented them
from pulling out of Iraq.

"Many companies have given control over the evacuation procedure to the US
Department of Defence, so we cannot leave even if we want to," said a
security company director. He said insurgents are now
targeting mercenaries in Iraq, aware that foreign contractors win
more headlines than soldiers. But the director stressed that under their
contracts, companies would still be compensated in full for any days lost
as a result of insecurity.

Seven Chinese were seized in central Iraq on Sunday, China's Xinhua news
agency said, Reuters reports. In a separate incident, eight
foreign men described as truck drivers who had been held hostage were
released, according to a videotape aired by al-Jazeera television on
Sunday. The men included three from Pakistan, two Turks, an Indian, a
Nepali and one from the Philippines.

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